After The Shouting, It's Time To Fix Obamacare

Now the Republican effort to defund or repeal Obamacare has crashed and burned, that doesn't mean the law should not be modified.

Somehow the GOP forgot the ancient wisdom that you can't fight something with nothing. Repealing Obamacare without offering a constructive alternative that met most of the act's laudable objectives was a bankrupt strategy.

With the stop-the-government threat over (at least for a few months), let's look at what is good and bad in the Affordable Care Act — and let's call it that, so that passions about this president don't cloud the issue.

There is much to like. Moving toward universal health insurance coverage is a good idea. In particular, eliminating pre-existing condition limitations and using a system of adjusted community rating (premiums that don't vary based on people's health conditions) are very good ideas. States creating publicly chartered insurance exchanges is also good for uninsured people.

There are, however, many problems, mostly because the act tried to do too much too soon, and at a price tag we can't begin to afford.

To get to universal coverage, we should move incrementally in affordable steps using current programs to chip away at the uninsured. So, expand Medicaid eligibility for the near poor, but not all the way to 133 percent of the federal poverty line at first. Let early retirees into Medicare, which is a program that works. And most of all, we should bolster employer-sponsored insurance — rather than creating incentives for employers to dump coverage as the ACA does.

We should encourage or even require larger businesses to fill coverage gaps. The act showed the way by requiring parents' group plans to cover children up to age 26, immediately covering 2 million uninsured people. That happened seamlessly, without great cries of pain. We might also require larger firms to provide, say, a half subsidy of COBRA premiums for six months for laid-off employees, and a partial insurance subsidy for part-time workers. Using current programs that work avoids huge new programs and subsidies.

Unfortunately, Congress got trapped into creating a budget-busting program of insurance premium subsidies for middle-income people. Subsidies under the ACA, for example, would be available in diminishing amounts to an uninsured family of four with an annual income all the way up to $94,000. With the U.S. median household income around $50,000, those subsidies reach deep into the middle class. How can we afford that and who will pay?

Congress took such a bone-rattling step because it bought this logic: 1) We have to do away with pre-existing conditions (correct); 2) but then the individual insurance markets in the states will blow up because sick people will flood in, raising rates and forcing the good risks out (partly correct); so 3) we have to require everyone to buy insurance to get healthy people into the pool (whoa!); but 4) we can't put an individual mandate on lower-income people unless we subsidize their premium costs (hold your horses!).

There is an alternative. Most states, including Connecticut, have high-risk pools. They are supposed to provide last resort insurance options to people in the individual market without regard to pre-existing conditions. Typically, the states subsidize those pools to keep rates down and/or have capped rates and pass the extra costs back onto commercial health insurers who then "socialize" those costs across their books of business.

In other words, the private sector — not government — bears an important share of these costs in a way that doesn't impact the federal budget (hooray!). This approach could work nationally, with aggressive marketing aimed at signing up the uninsured. That could be done through the health insurance exchanges created by the ACA, which can work well for the individual market, but for small businesses are probably unnecessary and displace private sector effort.

Finally, the act badly overreached in imposing new regulations and requirements that are significantly driving up costs on existing employer-based plans.

Where do we go from here? Stop talking about defunding or repealing the ACA. The goal of policy-makers — Republican and Democratic — should be to preserve what's good about the ACA and to fix what doesn't work, creating an affordable law that makes sense. Strip out excess elements, drop the individual mandate, drop the small business exchanges (private exchanges are developing that do that job better), take the Medicaid expansion in smaller bites, drop or cut the new subsidies, cut back on the mandates imposed on employer insurance plans but get business to help fill gaps, and get costs in line with budget realities.

Then, we can think about the real problems — how to effectively slow the growth of health care costs, and how to fix the dysfunctional government in Washington.

Robert E. Patricelli is CEO of Women's Health USA, based in Avon. He has worked on health care policy in the federal government and the private sector as CEO of several Connecticut companies he founded.